Short title

This Act may be cited as the

Currency Manipulation Prevention Act

Findings

The Congress finds as follows: (1)Products produced in a foreign country can be produced or assembled with lower input costs through the intervention by the government of that country in international currency markets, in order to maintain its own currency at artificially low valuations. (2)This practice, in effect, subsidizes the exports of such a country while erecting a cost barrier to goods imported into that country. (3)The United States has the authority under current law to redress practices by other countries that decrease market opportunities for United States exports or otherwise distort trade, including currency manipulation. (4)Misalignments in currency caused by government policies intended to maintain an unfair trade advantage nullify and impair trade concessions. (5)A country is considered to be manipulating its currency to obtain an unfair trade advantage if— (A)its currency manipulation has a subsidy-like effect; (B)its currency manipulation constitutes a nullification and impairment of the benefits of the GATT 1994; or (C)its currency manipulation results in a contravention of the intention of the GATT 1994. (6)The International Monetary Fund also prohibits the use of currency manipulation as a method of gaining unfair trade advantage. The International Monetary Fund defines such manipulation as large-scale and protracted intervention in one direction to gain an unfair trade advantage. (7)Article XV of the GATT 1994 and the Agreement on Subsidies and Countervailing Measures both suggest that currency manipulation in order to gain an unfair trading advantage would violate the intent of those agreements. (8)Sections 301 through 309 of the Trade Act of 1974 provide the authority under United States law to take retaliatory action, including import restrictions, to enforce the rights of the United States against any unjustifiable, unreasonable, or discriminatory practice or policy of a country that burdens or restricts United States commerce. (9)Section 3004 of the Omnibus Trade and Competitiveness Act of 1988 (22 U.S.C. 5304) requires the Secretary of the Treasury to undertake multilateral or bilateral negotiations if it is found that a country is manipulating its currency, and Article IV of the Articles of Agreement of the International Monetary Fund prohibits currency manipulation.

Trade negotiating objective

Section 2102(b) of the Trade Act of 2002 (19 U.S.C. 3802(b)) is amended by adding at the end the following:

(18)

Exchange rate policy

The principal negotiating objective of the United States with respect to currency exchange rates is to ensure that governmental intervention in currency markets to stabilize short-term disruptive market conditions is of limited duration and is carried out in consultation with countries with major trading partners.

Report on currency manipulation

The Secretary of Commerce shall, not later than 6 months after the date of the enactment of this Act, and not later than the end of each 6-month period thereafter, submit to the Congress, the President, the United States Trade Representative, and the Secretary of the Treasury, a report— (1)describing actions by foreign governments to manipulate the currencies of their countries in order to increase exports from those countries to the United States or to limit imports of United States products into those countries, and describing the extent of such currency manipulation; (2)analyzing whether, and to what extent— (A)currency manipulation described under paragraph (1) affects the manufacturing sector in the United States; and (B)reduction of the manipulation and of the accumulation of United States dollars by foreign governments might affect United States monetary policy; and (3)setting forth all remedies against such currency manipulation that are available under applicable trade agreements and international institutions such as the World Trade Organization and the International Monetary Fund.

Proceedings

(a)

Action by the President

In any case in which the Secretary of Commerce, in a report under section 3, identities a government of a foreign country that is manipulating the currency of that country, the President, within 45 days after the report is issued, shall initiate negotiations with that country for the purpose of ending the currency manipulation. If the President, within 90 days after the report under section 3 is issued, is unable to reach an agreement with that country to end the currency manipulation, the President shall take the necessary steps to initiate proceedings under the applicable trade agreements or under the auspices of the World Trade Organization or other applicable international institutions, and under applicable United States law, including section 301 of the Trade Act of 1974, against that country on account of that currency manipulation. (b)

Compensation

(1)

In general

In the course of, or in addition to, action taken under subsection (a) with respect to a country, the President shall seek compensation from that country equivalent to the damages incurred by United States manufacturers and other adversely affected parties in the United States on account of the currency manipulation of that country. The President is not required to seek such compensation if he determines that to do so would not be in the national interests of the United States. (2)

Report if compensation not sought

In any case in which the President does not seek compensation under paragraph (1), the President shall transmit to the Committee on Energy and Commerce and the Committee on Ways and Means of the House of Representatives, and to the Committee on Commerce, Science and Transportation and the Committee on Finance of the Senate, a detailed explanation of the President’s determination of national interest.

Definitions

In this Act—— (1)

Currency manipulation

The term currency manipulation means— (A)manipulation of exchange rates by a country in order to gain an unfair competitive advantage as stated in Article IV of the Articles of Agreement of the International Monetary Fund; (B)sustained currency intervention by a country in one direction, through mandatory foreign exchange sales at a country’s central bank at a fixed exchange rate; (C)protracted, large scale intervention in global currency markets in one direction, by buying or selling United States dollars, to weaken or strengthen a currency; or (D)other mechanisms used by a country to maintain its currency at at fixed exchange rate relative to the currency of another country. (2)

GATT 1994

The term GATT 1994 has the meaning given that term in section 2 of the Uruguay Round Agreements Act (19 U.S.C. 3501). (3)

Agreement on Subsidies and Countervailing Measures

The term Agreement on Subsidies and Countervailing Measures means the Agreement on Subsidies and Countervailing Measures referred to in section 101(d)(12) of the Uruguay Round Agreements Act (19 U.S.C. 3511(12)).